If you've set up your dropshipping store and driven targeted traffic to your site but don't know what else you can do to further grow your business, don't feel discouraged. Many times, it takes a combination of different actions to win over the minds of an audience. An affiliate marketing program is a fantastic idea to help you drive more traffic to your website and spike your conversion rate.
What is affiliate marketing, and how does it work?
Affiliate marketing is a performance-based system where you encourage partners to promote your products in exchange for a commission as a business owner. At its core, affiliate marketing is a partnership whereby people can refer others to your business, and you pay them a commission for every conversion.
Today, many companies and e-commerce merchants have an affiliate marketing program that allows businesses and individuals to partner with them to promote their products. It all starts with potential partners expressing their desire to become affiliates by signing up on the company's or merchant's website and going through an approval process. The reason for the approval process is to vet who is associating with their business.
Once the sign-up is approved, the merchant gives the new affiliate a unique tracking code. Affiliates are then allowed to promote the merchant's products but must attach their code to the links. The tracking code allows the merchant to track customers as they click and purchase products and consequently pay each affiliate based on the data collected from the link with their tracking code.
Usually, an affiliate marketing program will pay via a flat sum of money or a fixed percentage of the total sale. However, some merchants also provide incentives to their affiliates in the form of free or discounted products in addition to their commission. The best thing is about affiliate marketing is that everyone wins! The merchants acquire new customers and can sell their goods at a faster rate, while the affiliate wins because they can leverage their audience and expertise to earn money.
Therefore, it is safe to say an affiliate program is a customer acquisition tool, and it can be used both in business-to-consumer (B2C) and business-to-business (B2B) campaigns.
In a similar way, you too can start an affiliate program, get affiliates for your dropshipping store, providing customized and trackable links to other content creators, and you'd be responsible for paying commissions on sales made using your affiliate links.
Why you should set up an affiliate program for your dropshipping store
Now that you know what affiliate marketing is, you may be wondering what the benefits of an affiliate program are to drop shippers (like you.) Here are some benefits of running affiliate marketing for your dropshipping store:
1. Low cost of start-up
One of the biggest reasons to create an affiliate program for your dropshipping store is that it is cheap to create. You don't need a dedicated team department or set aside huge sums for software and more. Rather, you can invest in affordable software to run the program while your affiliates are responsible for coming up with their marketing content.
2. Low ongoing costs
When you set up your affiliate program, there's very little to spend since the affiliates will bear the chunk of the cost involved in marketing activities. This means the program won't interrupt your cash flow, unlike other marketing models that require a substantial budget.
3. Low risk
Businesses that run affiliate programs suffer minimal risk since there is neither a significant cost investment nor a salaried team. Plus, payments are made only when affiliates fulfill their part of the agreement by ensuring conversion.
4. Reach a broader targeted audience
As a dropship store owner, there's only so much that you can do to reach your targeted audience. However, by having people partner with you on a reward basis, you will enjoy expanded reach to a new audience that might not have been easy to target.
5. Gain a high ROI
You can rest assured that your business will gain a high return on investment. This is mainly because consumers trust influencers and respond better to them. Chances are good that you will record increased sales when your affiliates recommend your products to their audience.
6. You're in the driving seat
When it comes to running an affiliate program, a notable fear that many business owners have is to lose control. However, there is no need to be afraid since you can control every aspect of the program, including choosing the affiliates to work with, determining how much commission you're offering, the nature of content affiliates can use, etc.
How to create an affiliate marketing program for your dropshipping store
Now that you know how beneficial an affiliate program can be to your dropshipping store, here's a step-by-step guide to developing a successful program.
1. Set goals for your program
Before you start an affiliate program, the first thing to do is have your goals set. You need to have a clear idea of what you intend to achieve by setting up an affiliate program. For most dropshipping store owners, the most popular goals for creating an affiliate program include increasing traffic, revenue, order values, conversion rate etc.
Now, set measurable goals that you would like to achieve via your affiliate program within a month, a quarter or a year. Be sure to include other metrics such as clicks, impressions and leads.
2. Do a thorough competitive research
If you look around, you will likely find that your competitors are running affiliate programs. This is the time to take a look at their programs and analyze it to position yours competitively. Find at least two competitors with affiliate programs and examine how they structure their programs. Investigate the terms and conditions and other details like what sort of training is provided for their affiliates, mode of communication, type of content, use of software etc.
3. Define the commission rate
To attract affiliates to partner with you, you need to decide on the right affiliate commission. You shouldn't have any trouble here if you researched the previous point. However, there are a few things to keep in mind. First, being generous with rewards can make affiliates troop to you rather than you finding them. Second, make sure you are realistic and that your final decision is in tune with your company's budget. The ideal commission rate is typically between 1% and 30%. Additionally, you can provide other incentives such as discounts on products to affiliates.
4. Decide on other key aspects of your program structure
This is the stage where you decide on other things about the program, such as:
Marketing channels that affiliates can use
Type of content allowed
How long will affiliates be eligible to earn a commission after someone clicks their link
The terms and conditions
Whether to handle it yourself or hire a dedicated affiliate manager etc.
5. Choose an affiliate tracking platform
You need an affiliate tracking platform that you'd work with. This platform will help serve as a bridge between you and your affiliates. There are several platforms you can choose for your affiliate program, including Affiliate Royal, Share A Sale, Click Bank, CJ Affiliate (formerly known as Commission Junction).
6. Start finding affiliates
At this point, you will need to recruit the right kind of affiliates to join your program. So go ahead and announce your affiliate program on social media, tell your email subscribers about it, and request affiliates on your website. Even when you get a few affiliates, and the program takes off, keep in mind that their job is to promote your products, but you are the one to promote the program.
7. Recruit and train affiliates
When you publicize your program, you will receive a lot of requests to sign up. Evaluate each candidate and choose the best fit to become a part of your affiliate team. You want to screen everyone to be sure that they can represent your business and that they're not scammy. When you have selected your affiliates, don't forget to train them to work within the rules and standards that you've set.
8. Keep track of how your affiliate program is doing
Once you've recruited your affiliates, you want to keep tabs on them and the program as a whole. In other words, you need to regularly check to see the affiliates bringing in the most profit, evaluate whether or not you're on course to hit your goals, communicating with affiliates to ensure that they're following the rules and making progress, etc. Finally, if the program isn't yielding the desired results, make sure you tweak the structure or rethink your affiliate lineup.
Now that you know what an affiliate program is and how to launch one, it's important to add that results won't happen overnight but be sure to treat your affiliates like partners and always evaluate the program to ensure that all is going as planned. Also, you will need to ensure that you are prepared for success by having suppliers that can deliver high-quality products promptly. :
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